Heritage Oil was in focus, with traders citing takeover speculation as well as hopes of a resolution to a dispute involving the company in Uganda.

Initially, gases group BG - down 24p at £14.56 - was said to be interested in Heritage's assets in the Kurdistan region of Iraq, a suggestion which helped push Heritage's shares up nearly 9%. But BG, although it would not comment on "market rumour", indicated that Iraq did not form part of its current plans.

This took some of the shine off Heritage's shares, but even so they closed 7.5p higher at 282p. Austrian energy group OMV was mentioned as another possible predator, while separately there was talk that a solution could be close to a $404m tax dispute with the Ugandan government relating to Heritage's sale of assets to Tullow Oil.

Heritage shares have fallen sharply since January when it said it had discovered gas in Kurdistan, rather than the oil which had been expected.

Elsewhere investors suffered another nervous day, with the market buoyed by a near $2 a barrel drop in the oil price on talk that Opec might increase production to make up for any shortfall from Libya's fields. But with continuing turmoil in the country, and confusion about any Opec move, the FTSE 100 lost most of its early gains to end virtually unchanged, up 0.98 points at 5974.76. Joshua Raymond, market strategist at City Index, said:

The last few weeks has seen traders use any fall in the price of crude oil as an opportunity to buy into share weakness in hopes of a short term bounce. That has not happened today which suggests that traders are more concerned about the longer term implications of instability in Libya and the Middle East on the price of crude oil, particularly in the context of Libya seemingly stepping closer to civil war with each new day.

It was not only Libya causing concern. Randgold Resources was the biggest faller in the leading index, down 400p at £44.80 on fears that violence in the Ivory Coast could hit the company's operations there. Earlier in the week Cluff Gold, down 7.25p at 101.75p, suspended its operations in the area.

Other miners were also under pressure, with Antofagasta down 38p at £13.82 despite news of a special $1 a share dividend, as profits came in below expectations due to increased energy costs. Evolutions Securities issued a sell note, with analyst Louise Collinge saying:

These are a strong set of numbers and the total dividend proposed should please investors. However, the stock remains expensive compared to its peers and to the major diversified mining companies, and would become more so if the 2011 production target were to become a stretch.

But Old Mutual added 4.4p to 137.7p after well received results, while BT was 7.3p better at 191.1p and Vodafone rose 3.15p to 181.85p following a positive note on the telecoms companies from Morgan Stanley.

Among the mid-caps, Mothercare climbed 3p to 481.1p after UBS raised its recommendation on the retailer from neutral to buy with a 550p a share target. The bank said:

Mothercare shares have corrected 21% since the start of the year and have underperformed the UK general retail sector by 15%. We believe the share price correction is overdone, and see this as a good entry point for investors looking for quality brand exposure and international growth. We believe 21 times is an appropriate 2011 estimated multiple for the international division, implying only 15p per share for the UK business at the current share price of 480p.

Lower down the market, Johnson Services Group slipped 1.25p to 32.5p despite reporting profits up 18.9% to £14.5m in what the company - which encompasses dry cleaning outlets, textile rental to corporations and corporate events like Wimbledon and next week's Cheltenham race festival, as well as facilities management - admitted was a difficult year. Johnson, chaired by turnaround specialist John Talbot who worked on the administration of Robert Maxwell's empire and former MP Geoffrey Robinson's TransTec, said the severe weather had knocked £1.6m off the dry cleaning division's operating profits. But the upmarket Jeeves business did well, as did its textile rental division. In addition, the facilities management business benefited from the addition of seven PFI contracts bought from Jarvis when that group went into administration.

It has cut its debt from £676.7m to £59.5m, and has its eye on snapping up further PFI contracts as they become available, as well as bolt on acquisitions for its textile business. It is upbeat about the outlook, with house broker Investec forecasting 2011 profits of £15.5m, although it warned about the effects of the rising cost of energy and cotton.